NEW YORK (CNN/Money) - If the stock market is doomed, some folks feel as though they might as well invest in sin.

So-called "sin stocks," specifically. Consumer staples that may have no socially redeeming value whatsoever but are nonetheless likely to hold up amid a struggling economy. Stocks such as UST, the biggest producer of moist, smokeless tobacco, alias "dipping tobacco" or just plain "dip."

The more discreet, lower-profile cousin of the wadded, "chewing tobacco" enjoyed by ballplayers and rodeo stars worldwide, "dip" is a growing industry, says Joseph A. Gomes, a senior analyst with C.L. King & Associates. "It's a very profitable business and it's doing all kinds of things to drive growth."

Greenwich, Conn.-based UST is a holding company with a market capitalization of about $6 billion. The company is the biggest U.S. maker of moist, smokeless tobacco products and also produces wines, through its subsidiaries, U.S. Smokeless Tobacco Company and International Wine and Spirits. The company's biggest brands include Copenhagen, Skoal, Rooster and Red Seal.

The company trades on the New York Stock Exchange under the ticker UST (UST: down $0.21 to $30.27, Research, Estimates). Its 52-week range has been from a high of $41.35 to a low of $25.77.

Last week, the company warned that due to some weakness in its earnings projections for the second half of the year, 2002 earnings per share will come in at about $2.95 per share, instead of its previous forecast of $3.04.

The company cited an increase in marketing spending behind its core brands -- a complaint made by other tobacco product sellers recently -- and the launch of some new products for the shortfall. The company also said that moist, smokeless tobacco category growth has slowed from its historical rate of 2 percent to 3 percent to about 1 percent from the beginning of the year through August.

But when many stocks are suffering in the wake of a slowdown in the economic recovery and weakness in equity markets, tobacco is a pretty safe buy, as many consumer products tend to be, said Gomes.

"It has a little sensitivity to the economy, where maybe someone will stretch their tin of dip a little longer if they are out of work or worried about finances, but it's a safer bet than a lot of other industries," he said.

For other reasons why Gomes picks it as his favorite stock, read below.

Why do you like UST? What makes it a compelling buy for you?

It has a dominant position in the moist, smokeless tobacco market. It has strong cash flows, a high profit margin and pays out a dividend of about 6 percent. It has a different, lower risk profile regarding tobacco litigation versus cigarette companies.

What's the target market and what kind of growth can it reasonably expect to achieve beyond this market?

There are maybe 5 million users of dip in the United States. I'd say 99.5 percent of them are men, fairly outdoorsy types of men. The biggest markets are in the Deep South.

What's working in its favor are the increasing restrictions on where people can smoke. There are between 40 million and 50 million smokers. And there are so many public places where smoking is banned -- restaurants, the work place, plane rides. So the potential for growth among smokers is pretty great as people are beginning dual use, of both cigarettes when they can and dip when they can't smoke, but still want to get their nicotine in a discreet way.

What are its competitors in the sector and why does it stand out for you?

Most people think tobacco products are all the same, but they are quite different. Competitively, you can't compare it to cigarette producers or even chewing tobacco, because it is a different market. It is dipping tobacco. UST has 75 percent of the market share. It's followed by Conwood, a privately owned company; Swedish Match, which dominates the Swedish market (dip's other big market); and another one called Swisher.

The company is working to introduce new products that would eliminate the need to spit after dipping, which is the most distasteful component of the product for some people. They have a product called Revel in test markets which is a kind of dip created to be spitless.

In addition, when you open the tins, the tobacco in there is very fine, but it's also loose. People don't want to worry about accidentally swallowing tobacco. So the company is developing a pouch that could go in the mouth that would then prevent swallowing the loose tobacco.

Additionally, with tobacco, there is always the risk of litigation, but the risks are a lot less with moist, smokeless tobacco. There is a strong, well-documented link between cigarette smoking and cancers, but there is not the same link between moist, smokeless tobacco and oral cancers. Traditional cigarette companies have had thousands of suits filed, and some have been settled and some have gone to court, and the companies have had to pay enormous sums. But only one smokeless tobacco case has ever gone to court, and UST won it. So the litigation risks are a lot less.

On Sept. 12, the company cut its earnings forecast for the second half of the year, due to sluggish sales volume growth at its largest unit, U.S. Smokeless Tobacco Co. In addition, R.J. Reynolds recently cut its earnings estimates, due to increased pressure from rivals.

Keeping these recent warnings in mind, amid a national economic slowdown and weak stock markets, what are the challenges right now facing the sector as a whole and UST specifically?

The biggest risk is that government keeps putting excise taxes on the tobacco products. And so a tin of dip, which might be $4 or $5 normally, with taxes, it might become more like $8 or $9. When the price of your product is doubling because of taxes, that's a risk. But it's no more risky than any other tobacco products.

The other big risk is that its main competitor, Conwood, has sued it on antitrust concerns and has won. UST has appealed the decision and lost, but it is now going to the Supreme Court. If they lose and the amount that has been proposed ends up becoming the settlement, it would be perhaps the largest such settlement in an antitrust case.

This is not going to hurt UST's business model, in that the company has already put up the entire amount with the court, but where it would hurt it is the publicity. It would be bad publicity.

How do you rate the stock? What are you profit targets on the stock for the next year? What is your price target?

I rate it a "strong buy," our highest rating. Our earnings per share target for fiscal 2002 is $2.95, which is down a little from last year, but virtually flat. Our price target is $45.

Finally, in the interest of disclosure, do you or does C.L. King & Associates own any shares of UST?

I personally own shares of it but my firm does not, to my knowledge, own any shares of it.